Over half (52 per cent) of UK financial advisers (IFAs) say their clients’ appetite for risk has decreased over the last 12 months, with 8 per cent saying the drop has been ‘dramatic’, according to new research by rplan.co.uk, the online investment platform.
Three in 10 advisers (29 per cent) believe the number of UK people using investment ISAs this year will fall, with 44 per cent saying it will stay the same and 18 per cent seeing an increase.
Half (50 per cent) of advisers believe more people would save or invest if the ISA allowance was raised, although 41 per cent believe the number would stay about the same.
Over a third of advisers (35 per cent) say the main reason UK people will not invest this year is because they are worried about volatility on financial markets while 35 per cent say it is because of a lack of spare cash. The main reason people will invest this ISA season is because interest rates are so low, according to 41 per cent.
More than half (55 per cent) of advisers say UK equities are the most attractive asset class at the moment, versus 39 per cent citing European equities and 25 per cent US equities. Only 7 per cent say cash is the most attractive option.
Stuart Dyer, Rplan.co.uk’s CIO, says: “No doubt the volatility in January and Brexit vote later this year are factors in making investors more cautious this year, although there are other issues around the world that need to be considered.
“But investing has never been easy and there have always been risks facing investors. They should use this year’s ISA allowance before they lose it and either invest in a balanced portfolio with a long term view of five years or more, or take advantage of the new flexible ISA rules and put money into cash now and invest later.”